The professionals

The pride & passion

Commitment and professional pride are two of the defining characteristics of STEVE PATEMAN, Executive Director of Corporate, Commercial and Business Banking at Santander UK plc. Sarah Perrin talks to one of the founders of the Chartered Banker Professional Standards Board.

As Steve Pateman, Executive Director of Corporate, Commercial and Business Banking at Santander UK plc, points out: “Banking is a people business.” He explains that people and their actions can either destroy your bank or make it into a fantastic business: “As I tell my team, we can’t guarantee to give every customer who approaches us what they want. But we can guarantee to listen to them and try to help. This is completely and utterly within our gift and it’s the least we can do.”

His view has been shaped during more than 30 years working in the sector. Pateman entered the industry in 1980, aged 16, keen to leave school and looking for the best opportunity for work.

“Unemployment was high at the time and I was scared that like the three million others I wouldn’t get a job,” he recalls. “I liked economics and business studies and had an insight into NatWest through their local sponsorship of Young Enterprise, so I contacted the banks as they seemed to offer the best chance of employment.”

Unsuccessful in getting a role at the local branch, he gained employment with NatWest’s inland payments business in its international banking division in London, but says: “It wasn’t really until I had been with the bank for around seven years and actually began working directly with businesses that I thought, ‘This is, for me, a good career, getting to know businesses, how they work and helping to make things happen’.”

In the 1990s, Pateman moved into the growing specialism of investment banking where he got direct hands-on experience with mergers, acquisitions, disposals and IPOs. By the end of the decade, Pateman was running NatWest’s large corporate business for the UK.

Subsequently, when RBS took over NatWest, Pateman moved into broader managerial roles, initially in the mid-corporate sector, becoming Managing Director of Corporate Banking, then focusing on smaller businesses as MD of Commercial Banking, and finally becoming CEO of Business Banking.

He moved to Santander in 2008 “to effectively set up” its corporate and commercial banking business, becoming Executive Director of Corporate, Commercial and Business Banking in March this year. His appointment as a member of Santander UK’s board was confirmed in June. His role encompasses all of Santander UK’s SME business.

Transforming business

Looking back over his 24 years in corporate, commercial and business banking, Pateman says: “I have worked with some fantastic entrepreneurs, who have demonstrated great vision and passion and achieved some wonderful things with their businesses. It’s been a real privilege to be part of that and to help them achieve their business ambitions.”

Having specialised in the retail and leisure sectors and attended numerous hotel and store openings, he thinks it’s “fantastic” to have been able to finance so many buildings around the UK. But perhaps his proudest moment concerns one of his smaller lending decisions, involving a business supported by youth charity The Prince’s Trust. The company was run by two young female dress designers, both of whom had been in prison: “They only wanted £5,000 for working capital, but they just couldn’t get it because on paper they failed every scorecard,” Pateman says. “They wrote to me with their business plan and explained what they wanted to achieve. It was actually a very good and sensible business plan. I got real satisfaction helping them with that £5,000 which, for them, was as important as it would be to a big company borrowing £100 million.”

Pateman appreciates that these kinds of decisions can “transform a business for better or worse”. This puts a responsibility on those working within banking, he believes, and means that banking should be considered a profession.

“You work with a business with its plans, vision and ambitions; and you are one of the people who can help make it happen. That’s quite a responsibility. However, there are times when you have to say that you cannot help make it happen, which means perhaps the company ceases to exist and people lose their jobs,” he says. “These lending decisions mean you have a responsibility and you have to take that very seriously.”

Risk needs to be assessed and the correct process followed, he stresses – but a professional banker will always “try to help”. Some of Pateman’s saddest career moments have been when he has not been able to help a business because it had gone beyond the point of saving. “That’s terribly sad,” he says. “I don’t think you should make emotional decisions, but you should feel something – and if you don’t, you probably haven’t got a sense of responsibility.”

Emphasising professionalism would be a “good start” towards restoring trust in banking, Pateman believes. Customers want to feel their bank values them and is interested in them, and wants to sustain a long relationship over their personal or corporate lives.

“I have known some clients for 20 years,” Pateman says. “A lot of it is about the fact that they trust me to look after them. I have always been prepared to listen and keen to find solutions. That creates a good basis for a relationship – you get to know and understand the business and are trying to help. That’s why I think the relationship lasts and lasts and the customers come back to you for more and more advice.”

Regaining integrity

In contrast, some of the behaviour that has got banking into trouble is “indefensible”, Pateman says. He refers to the Panorama television exposé of the way some bank financial advisers were selling products, with one saying to a customer he could tell by looking in her eyes what risk she could take. “Clearly it happened – they managed to film it,” Pateman says. “And it is everything that, as a professional banker, you would find unacceptable.”

He also refers to some investment banking activity in the form of proprietary commodity trading driving up, for example, the price of wheat to levels that have wider repercussions for global agricultural welfare. “If the industry is to regain its integrity, then you have to look at such things from a broader perspective and say, ‘Am I happy to be associated with that level of activity, knowing what it does?’ If the answer is ‘No’, then you don’t do it. As a banker and a business leader you have a social responsibility to look beyond the immediate benefits to your P&L. You should not hide behind the positives for shareholders if your decisions will negatively impact the broader global or even local economy in the longer term.”

This isn’t to say that profit generation and professionalism are mutually exclusive. “In the long term, if you do the right things you will end up with a better and more sustainable business,” Pateman asserts. “You may not ride the biggest wave at the most favourable point in the market – but that highest wave could turn out to be a problem. You have to judge every opportunity on its merits for what it is and not be led by what everybody else is doing.”

Changing behaviour

Setting professional standards can be of value, despite the challenges of encompassing the multidisciplinary nature of the banking sector. “It’s hard, but what you can do is set out a series of guiding principles that you think are good behaviours,” Pateman says. “Then you have to rely on your management to adhere to them – not in terms of appointing someone to fill in a form every month, but by ensuring these principles are integral to the way they manage the business, lead their people and interact with their customers.”

This, Pateman notes, leads to the issue of the “fallibility of humans and the pressure individuals are under to achieve set targets”. He explains: “In banking, in the build-up to the financial crisis, managers were under relentless pressure to achieve quartile returns on equities and absolute growth in profitability and marketshare/flows. This led managers to choose to accept more risk to achieve an earnings outcome that was, in the long term, not in the interests of that organisation or indeed its shareholders.

“Therefore, you are back to judgment. Whether you set standards for ethics, risk appetite or whatever it happens to be, you are then reliant on people to implement them in the way they manage their business. And you have to recognise that there are incredible pressures on those individuals, which means, sometimes, the outcome isn’t as you would have wanted it.”

Changing behaviour can be a challenge. As Pateman explains, for anyone “growing up” in the banking industry from 1998 to 2007, success was defined by hitting targets. “It was very black and white. If you hit your numbers, you got a bonus, you probably got promoted and you had a good career. If you didn’t hit your numbers, none of those things would apply to you. If you grew up in that environment, then your view of the world is that it’s all about sales and numbers and achieving targets – and that’s all that matters.”

How does Pateman think you change this kind of thinking? “By trying to get people to see that management is about a much broader sense of responsibilities. It’s not about the numbers you have achieved in isolation, but how you achieved them. What was the customer experience like? What was the staff experience like? What was the risk you absorbed to get to that outcome? It’s about a much broader analysis of what success looks like.”

Steve Pateman is a member of the Chartered Banker Professional Standards Board.

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